Bill Chandler had operated a successful restaurant in the area. Bill had used his well-earned retirement savings to invest in this new venture in the beginning, and he committed himself to winning over skeptical customers to his business. Customers loved his restaurant. It was a huge success over the course of many years. Now, Bill reflected on the future of his business after 30 years. Finding good employees had become difficult, especially when he reopened after the pandemic. Food costs continued to climb. He found himself having to devote his attention to the restaurant 24/7, with no vacation or quiet time to himself. Bill hoped that one of his five children would run the restaurant when he retired. All of the children had been exposed to the restaurant and had worked in the business at some point. But none were interested. His most loyal manager had an interest but did not have the capital to purchase the restaurant. Bill kept pressing on, hoping that his continuing good health would remain forever so that he wouldn’t need to make a decision about his successor.
The world stopped. Paused. We all took a deep breathe to honor Queen Elizabeth II who died at the age of 96, making her 70-year reign the longest of any monarch in British history. The Queen served the United Kingdom from 1952 to 2022. She surpassed the record of 63 years and 216 days set by Queen Victoria. Millions of people tuned in to watch the funeral procession back to Windsor Castle where she was laid to rest beside her late husband Prince Philip. Following her death, her eldest son Charles become the King— King Charles III. Fortunately, there was a well-planned process for succession upon Queen Elizabeth’s passing. Sadly, many small business owners do not have anywhere near such a well-designed succession plan for their businesses.
Let’s explore this matter further. To everything, there is a season. A wise leader knows when it is time to leave. On the contrary, a foolish leader will prolong his reign. Good leaders deal with the realities of living (you live and you die). I’ve seen some managers delay leadership development of potential replacements because of fear. The actions, or the lack thereof, related to succession planning carry unintended consequences. Sadly, the leaders of many organizations are too busy and ignore the realities of life. This article examines the importance of succession planning for today’s small business owners. It will discuss how to conduct succession planning prior to the death of the founder and leader.
What is succession planning? Succession planning can be defined as “the process of identifying the critical positions within your organization, and developing action plans for individuals to assume those positions when the incumbents are no longer there.” For small businesses, succession planning means designating the person who will be next in line to carry on the tradition and expectations of the founder or owner. Some business owners believe that a family member will naturally succeed them. Some are deeply disappointed if this does not happen.
Here are some statistics about succession planning in our country. According to a survey conducted by Northern Trust (Nasdaq: NTRS) of more than 100 business owners, 75% of those surveyed had a succession plan in place. However, 50% were concerned about their successor’s ability to maintain and grow the business over the long term. Sixty per cent were concerned that a transition would result in family conflicts. According to other succession research, 86% of leaders believe succession planning is an “urgent” and “important” priority. Yet, only 13% believe the organization will do succession planning. Given these statistics, it’s clear that small businesses need to take succession planning more seriously.
Can any great organization exist after the death of its visionary founder? At the death of a distinguished leader, most organizations are left in confusion. Why does a leader feel that the world will stop if he’s not leading? A great leader who has vision is difficult to replace. Why would a business wait to consider a replacement until after he/she dies? Good leaders adequately prepare for their replacements. Everyone knows that a leader can’t live forever. However, many organizations avoid this topic. This is a fatal organizational mistake. Below are some positive steps for effective succession planning:
In today’s changing climate, leaders need to be at the forefront of developing talent to replace themselves and other top-level employees. Small businesses are no exception. The pandemic proved that poor planning of unexpected events can be fatal. Succession planning involves mentoring for the future. Chip Bell, a mentoring expert, defines mentoring as the “act of helping another learn.” Throughout history, leaders have been replaced. This article demonstrated the importance of succession planning for today’s small business owners. Like the succession planning process in place for the British monarchy, small businesses need to be ready. Pray that it is not too late.
© 2022 by D. D. Green
About Dr. Daryl Green:
Dr. Daryl D. Green is a business strategist, awarding speaker, and noted author. He is the Vice President of Marketing at AGSM Consulting LLC where he provides strategic planning, marketing, and product development to emerging and existing businesses. He provides consulting, guidance, and management training for today’s small businesses. He is a business professor operating a small business in Oklahoma. He has assisted over 100 organizations across the globe with marketing and management problems. If you would like more information about this article or business assistance, please contact Dr. Green at email@example.com or visit www.drdarylgreen.com.